PATERSON, a family
of this name at one period possessed the estate of Bannockburn,
Stirlingshire, and also a baronetcy of Nova Scotia, conferred in 1686,
but which has been long extinct. In 1745, Sir Hugh Paterson of
Bannockburn, baronet, joined the rebellion. His mother, Lady Jean
Erskine, was sister of the Earl of Mar, a strong Jacobite connection,
and Prince Charles Edward slept at Bannockburn house on the 14th
September of that year. Bannockburn house was also the prince’s
head-quarters during January 1746. Sir Hugh’s grand-daughter is said to
have been privately married to the prince, but she released him to
promote the Stuart cause. Another Miss Paterson, belonging to a
respectable family at Baltimore, made, in the present century, an
equally romantic match, having married Prince Jerome, brother of
Napoleon I.; but was obliged to separate from her husband by a dynastic
divorce.

John Paterson, one of the
ministers of Aberdeen, was consecrated bishop of Ross in 1662, by James
Sharp, archbishop of St. Andrews. He had at one time signed the
Covenant. His son, John Paterson, incumbent of the Tron Church,
Edinburgh, was in 1674 consecrated bishop of Galloway, in his father’s
lifetime. He was bitterly opposed to the Presbyterians. In 1679 he was
transferred to the see of Edinburgh. In 1687 he was appointed archbishop
of Glasgow. At the Revolution he was deprived of his see. In 1692 he was
arrested and committed to the castle of Edinburgh for plotting against
the Revolution settlement, being at the time under sentence of
banishment. In 1701 he was still in confinement. He died Dec. 9, 1703,
in his own house at Edinburgh, in his 76th year. He was the last
archbishop of Glasgow, and his violent counsels seem to have contributed
to the overthrow of the Stuart government. His family went to England,
and his grandson, an eminent solicitor in London, took an active part in
the architectural improvement of the metropolis, as was recognized by
the votes of the corporation, and borne witness to in his portrait by
Sir Joshua Reynolds. He was a member of parliament, and chairman of Ways
and Means. With the Lord-chancellor Camden, he was one of the executors
of the will of his friend, David Garrick.

In the United States, as
throughout the colonies, as well as on both sides of the Tweed, persons
of this name are numerous. The progenitors of most of the families which
bear it, are supposed to have been of Scandinavian origin.

PATERSON, WILLIAM, the founder of the bank of England, and
projector of the Darien Expedition, was born at the farm of Skipmyre,
Dumfries-shire, in March or April 1655. His father was a farmer, who
appears to have possessed lands of his own, at some distance from the
farm he held on lease. He seems to have received the education common to
boys of his condition at the period, viz., grammar, writing, arithmetic,
and some Latin, and, according to tradition, was destined for the
Presbyterian church, but in 1672, in his 17th year, he was obliged to
leave Scotland, council warrants having been issued for his seizure, on
a charge of having had communication with the persecuted ministers and
others then in hading in the wilds of Dumfries-shire. He went to
Bristol, to a relative of his mother’s, a widow, who, on her death soon
after, left him some small amount of property. He was afterwards
received into the counting-house of a relative, a merchant in London.
Subsequently, he was engaged in trade in the West Indies. There is no
authority whatever for the loose statements that have been made that he
was at one time a missionary, and, at another, engaged with the
buccaneers. It seems certain, however, that he had acquired much
information respecting Spanish America, which could only be furnished by
the latter, as he had not been there himself.

On his return from the
West Indies, he became eminent as a merchant in London. In 1690 he
founded the Hampstead Water Company, and he was treasurer of a similar
Company in Southwark. In 1691 he projected the Bank of England, taking,
it is said, the bank of St. George, in Genoa, as a model. The scheme
met, at first, with great opposition, one of the most influential and
most persevering antagonists of his financial views being Mr. Lowndes,
the secretary of the treasury, but, being supported by the principal
London merchants, the bank was established in 1694. Its shares, to the
amount of £1,200,000, were taken with great rapidity. Its first body of
proprietors numbered 1,300 among whom was the celebrated John Locke.
Paterson himself subscribed for £2,000 stock, and was one of the first
directors of this great national establishment. He next proposed to
found the Orphan Fund bank, to relieve the Corporation of London, on
account of money due to the city orphans, a project which led to his
withdrawal from the bank of England. The directors conceived that he was
not entitled to do any other banking business than theirs, and, not to
be restricted in his operations, he sold the stock he held as a
qualification for a seat at the board, and voluntarily retired. With the
bank of Scotland, founded in 1695, he had no participation whatever,
although this has been frequently erroneously stated.

His great plan for the
formation of a Company of trade and colonization in Africa and the
Indies, afterwards called the Darien Company, was not at first a
Scottish affair. For ten years he had offered it to the English
minister, to the merchants of Hamburg, to the Dutch, and to the elector
of Brandenburg, who all declined to entertain it. On the invitation of
some of his countrymen he next propounded his scheme in Scotland. It is
stated by Sir John Dalrymple, that that ardent patriot, Mr. Fletcher of
Salton, brought Paterson to Edinburgh, to submit his plan of trade to
the Scottish parliament and people, and that Fletcher introduced him to
the marquis of Tweeddale, then Scots minister, and persuaded him to
adopt the project. Lord Stair and Mr. Johnston, the two secretaries of
state, with Sir James Stuart, the lord advocate, also gave their
sanction to the scheme; and, in June 1695, a statute was passed in the
Scots parliament, followed by a charter from the crown, for creating a
trading Company to Africa and the Indies, with power to plant colonies
in places not possessed by other Europeans.

Paterson’s plan was to
form an emporium on each side of the isthmus of Darien, for the trade of
the opposite continents. The manufactures of Europe were to be sent to
the Gulf of Darien, and thence conveyed by land across the ridge of
mountains that intersects the Isthmus, there to be exchanged for the
produce of South America and of Asia; and thus, to use his own emphatic
language, he would wrest the keys of the world from Spain, then in
possession of South America. English as well as foreigners were admitted
into the Company. The original leaders in the scheme, whose names are
inserted in the Act 1695, were nine residents in Scotland, with Lord
Belhaven, and Sir Robert Chiesley, lord provost of Edinburgh, at their
head, and eleven merchants of London, headed by William Paterson and
Thomas Coutts. The sum of £300,000 was, in a few days, subscribed in
London, and there the first meetings, for the constitution of the
company, were held.

This magnificent project
was ruined through the infamous partiality of William III., who was
mainly indebted for his crown to the Presbyterians of Scotland, and the
mean jealousy of the English nation. The alarm was first excited by the
East India Company, and the West India merchants. In Holland and Hamburg
the sum of £200,000 had been subscribed. In the latter city the English
consul presented a memorial to the senate, disowning the Company, and
warning them against all connection with it. But though the assembly of
merchants returned a spirited reply, they soon withdrew their
subscriptions, and the Dutch followed their example. Both houses of
parliament, on December 13, 1695, concurred in a joint address to the
king, remarkable for its absurd, narrow, and illiberal views, against
the establishment of the Company. The House of Commons instituted an
inquiry into the case, and after examining Paterson, his Scottish
colleagues in London, and their English partners, issued an impeachment
against them for raising money in England by shares in their Company,
under an act of the Scottish parliament. Although the impeachment was
soon abandoned, the English subscriptions were withdrawn, and the
prospects of the Company in London were nipped in the bud.

Paterson, however, was
not easily intimidated, and the Scots people, indignant at the
opposition which the scheme had met with in England, avowedly because it
would be beneficial to Scotland, immediately subscribed £400,000,
although at that time there was not above £800,000 of cash in the
kingdom. So great was the national enthusiasm, that young women threw
their little fortunes into the stock, and widows sold their jointures to
get the command of money for the same purpose. Paterson himself
subscribed £3,000 to the stock of the company. At the very outset a
mishap befell the Scottish company and its projector which had an
adverse influence on the fortunes of both. This was the loss of a large
portion of the Company’s capital, amounting to £25,000, which had been
entrusted by Paterson to an agent in Holland, for the purchase of stores
for the Company’s projected expedition of five ships to America, but
misappropriated by the latter. A board of inquiry was appointed to
investigate the circumstances, and their report fully acquitted Paterson
of all blame, and recommended that his services should be continued by
the company. The directors approved of the report, except as to that
part relative to the acceptance of his services, and to the great
detriment of the interests and prospects of the Company, the very man
who had called it into being, was not employed officially in its first
expedition, and had no part in its guidance. He sailed simply as a
private adventurer, with his wife, and one servant. The name of the
latter stands in the Company’s books for a subscription for £100.

On the 26th of July 1698,
five large vessels, laden with merchandise, military stores, and
provisions, with 1,200 persons on board, sailed from Leith to form the
projected colony. ON the arrival of the colonists at the isthmus of
Darien, they purchased lands from the natives, and established their
settlement at Acta, a place midway between Porto Bello and Carthagena,
having a secure and capacious harbour, formed by a peninsula, which they
fortified, and named Fort Saint Andrew. The settlement itself they
called New Caledonia; and, on the suggestion of Paterson, their first
public act was to publish a declaration of freedom of trade and religion
to all nations.

The infant colony was
soon exposed to internal dissensions, from want of a proper head; and
the native Indians continued to alarm them with preparations of the
Spaniards for their expulsion. It was much harassed by the latter, and,
in consequence of orders sent from England, the governors of the
colonies in the West Indies and America issued proclamations,
prohibiting any succour being given to the Scots at Darien, on the weak
pretext that their settlement there was an infringement of the alliance
between England and Spain. But in the papers of the Darien council,
preserved in the Advocates’ Library, it is averred that previous to the
colony leaving Scotland, the right of the Company was debated before
King William, in presence of the Spanish ambassador; and that, during
the time the subscriptions were in course of being collected, Spain had
made no complaints against the formation of the Company. Besides this,
that part of the country where the colony settled was a territory never
possessed by the Spaniards at all, and was inhabited by a people
continually at war with them. To add to the misfortunes of the settlers,
their provisions were soon exhausted, and they were indebted to the
hunting and fishing of the natives for the scanty supplies they
received. At the end of eight months those who survived were compelled,
by disease and famine, to abandon the settlement, and return to Europe.
Paterson himself was seized with fever, and his wife dying was buried in
the colony. In his illness he was carried on board the ‘Unicorn,’ one of
the Company’s ships, and conveyed to New York, where his life was for
some time despaired of. On his recovery, he sailed for Scotland, and
arrived at Edinburgh on the 5th December, 1698. He soon regained the
confidence of the Company, was admitted among the directors, and his
name appears to their subsequent acts.

In the meantime, two
other expeditions had sailed from Scotland. When the second arrived,
they found the huts burned, and the forts demolished. After being joined
by the third party that went out, they were attacked by the Spaniards
from Panama, but having stormed the enemy’s camp, they repulsed the
Spanish force with great slaughter. At last a larger force arrived from
Carthagena, and, after a siege of nearly six weeks, they were obliged to
capitulate, on condition that they should be allowed to embark with
their effects for Europe. Of the three expeditions, not more than thirty
persons survived, to carry to their native country the disastrous
intelligence of the utter ruin of the colony. An interesting description
of the rise, progress, and failure of this well-conceived, but
ill-fated, undertaking will be found in Sir John Dalrymple’s Memoirs of
Great Britain and Ireland.

Paterson’s spirit was
still ardent and unbroken, and while he was among the foremost to calm
the public irritation at the treatment received from the English
government, to avoid a war between the two countries, which appeared
imminent, he set himself to devise suitable means for recovering the
company’s losses. He projected a new plan, admitting England to a large
share in the advantages of the settlement, which he presented to the
Darien Company. In 1700 he is said to have published, anonymously,
‘Proposals and Reasons for Constituting a Council of Trade,’ a work
which has been erroneously attributed to the pen of John Law of
Lauriston. Although the latter was a relative of his own, he invariably
opposed his schemes as unsound and pernicious. The provisions contained
in this pamphlet were, in 1705, embodied, to a limited extent and in a
modified form, in the ‘Act for appointing a Council of Trade,’ one of
the last efforts at independent action of the Scots parliament and
nation. To Paterson’s enterprising spirit the trade and prosperity of
his country were much indebted. He was an ardent advocate of free trade,
and his principles were those which now govern the mercantile policy of
this country.

In 1701, he submitted to
King William his new plan of commerce and colonization in Spanish
America, in order to counteract the ambitious designs in Europe of Louis
XIV. It was adopted by the king, with whom he had several personal
interviews on the subject. The decided character of the Revolution in
the politics of Europe and the Acknowledgment of King James’ son by the
French king, had led his majesty at last to turn a favourable ear to the
project of the Darien Company. Unfortunately, his death, soon after, put
an end to the scheme altogether.

Paterson was a warm
advocate of the union with England, and he was employed, both in London
and Edinburgh, to settle one of the most difficult branches of the
treaty, namely, the arrangement of the public accounts between the two
kingdoms. IN this office two other gentlemen were associated with him,
Dr. Gregory and Mr. Bower, and they had £200 sterling each for the work.
He was elected a member of the first Imperial parliament for the
Dumfries burghs, but there being a double return, a Mr. Johnstone having
been also chosen, he was unseated on petition.

In the last Scots
parliament, resolutions had been passed recommending Paterson to her
Majesty for his good services, but the recommendation, like many others,
was disregarded. By the treaty of union, a sum amounting to nearly
£400,000 was agreed to be paid by the united kingdom, as an indemnity to
Scotland, for the losses sustained by the Darien Company, and this was
secured by an act of the Imperial parliament. Of this money Paterson
claimed about £30,000, chiefly founded on his contract when forming the
Company, and a special act of parliament passed in his favour in 1708.
The Court of Exchequer decided that he had “a just right to be paid out
of the equivalent money,” and “in regard that he had been very
instrumental in carrying on other matters of a public nature, much to
his country’s service, the judges thought it just that some way should
be found to give him the recompense for his services he merited, and of
which he had been disappointed.” Pursuant thereto, the House of Commons,
March 18, 1708, passed a resolution in Patterson’s favour, in regard to
his Darien claims, “and likewise that such a recompense be given to him
as might be suitable to his services, expenses, losses, and public
cares.” The ministers of Queen Anne, however, were not to be moved into
doing him justice, and it was not till after the accession of George I.,
and he had been reduced to great poverty, that he obtained the sum due
to him.

Meantime he continued to
urge financial reform on the attention of ministers. A representation
which he made to Lord-treasurer Godolphin, in December 1709, on the
disorders of the finances, was disregarded. Lord-treasurer Harley,
Godolphin’s successor, adopted some of his views, but did not employ
him. He had presented a memorial to ministers on his claims, and stating
his distress, but all the relief he seems to have got were two or three
sums of £100 and £50, which stand opposite to his name in Queen Anne’s
bounty list in 1712 and 1713.

His latter years were
spent in London, and it is believed that, in the period of his extreme
distress, he taught mathematics in Westminster. In 1803 he proposed that
a public library of agriculture, trade, and finance, should be formed,
and gave his own books towards founding such an institution in London.
It is thought that he was the original of Addison’s Sir Andrew Freeport
in the ‘spectator.’ Having, on the accession of George I. to the throne
in 1714, presented a memorial to his Majesty, the latter referred it to
his Treasury, and an act of parliament was passed, whereby Paterson
obtained the sum of £18,241 10s. 10-2/3d., charged on the Scottish
equivalent. His last successful effort in finance was the construction
of the Sinking Fund in 1717, for the redemption of the national debt,
which is still an essential element in our financial system. He died,
January 22, 1719. In the obituary of the ‘Register’ of 1718-19, he is
styled “the great calculator.”

He was a voluminous
writer on mercantile and financial subjects, but all his works were
published anonymously. A volume entitled ‘William Paterson, the Merchant
Statesman, and Founder of the Bank of England; his Life and Trials. By
S. Bannister, M.A., formerly Attorney-general of New South Wales,’ was
published at Edinburgh in 1857. The author mentions the following as
among his principal publications:

A Brief account of the Intended Bank of England. London, 1695, 4to.
The Occasion of Scotland’s Decay in Trade; with a proper Expedient for
Recovery thereof, and the Increasing our Wealth. 1705, 4to.
Proposals and Reasons for Constituting a Council of Trade. 1700. This
work was reprinted in 1751, by Robert and Andrew Foulis, Glasgow, and by
them erroneously attributed to John Law of Lauriston. This mistake led
Professor Dugald Stewart in 1761, to mention Law as its author, but
there can be no doubt it was written by Paterson.
An Inquiry into the Reasonableness and Consequences of a Union with
Scotland. With Observations thereupon, as communicated to Lawrence
Philips, Esq., New York. London, 1706, 8vo. P. 160.
Essay Concerning Inland and Foreign, Public and Private Trade. 1705.
Fair Payment is no Sponge. 1717. A tract written in reply to a pamphlet
by one Broom, against the proposal of a Dinking Fund, entitled ‘No Club
Law,’ declaring that it would apply a sponge to the public debt.
Wednesday Club Conferences. London, 1717.
Several of Paterson’s Letters are contained in a volume entitled ‘The
Darien Papers, being a selection of Original Letters and Official
Documents,’ relating to the Company, printed by the Bannatyne Club in
1849, from the manuscripts preserved in the Advocates’ Library.
Of his other numerous writings it is impossible now to give even the
titles.

An Historical Romance, entitled ‘Darien; or the Merchant Prince,’ by
Eliot Warburton, published in 1852, in 3 vols., is founded on the Darien
expedition, and has William Paterson for its hero. So imbued with
admiration of Paterson’s character and genius was the author, that he
was proceeding to the very scene of his enterprise, with the view of
promoting its revival, when, with all on board, the ship went down, and
was lost at sea. Paterson’s family are said to have been related to that
of Paterson, archbishop of Glasgow.

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